 Recession takes its toll on luxury marques
(China Daily)
Updated: 2009-03-06 07:55
Rolls-Royce, Lamborghini and luxury carmakers, who just five months ago said they'd buck the recession, are finding they're not immune after all. The new millionaires of Asia and the Middle East have curbed spending, executives from companies including Rolls and Ferrari said in interviews at the Geneva Motor Show this week, torpedoing a market they'd counted on to spur growth after the banking crisis eroded orders in Europe and the US. "Conventional wisdom has it that premium manufacturers do better in a downturn because people with more money can weather the storm," said Michael Tyndall, an automotive specialist with Nomura in London. "This time it's different." With demand from traditional buyers tumbling after the financial crisis cost 280,000 banking jobs, carmakers are responding with more modest models. Rolls, whose flagship Phantom starts at 300,000 euros, will start making the 200,000-euro RR4 in 2009. Porsche SE, maker of the iconic 911, added the cheaper Boxster and Cayman in recent years and will offer the family-size four-door Panamera from September. Rolls-Royce, the UK-based top-end brand of Germany's BMW, says demand is falling fastest in the once high-growth locations of China and Dubai. Volkswagen AG's Italian Lamborghini division said on Wednesday that China has turned into a tough market after previously supporting sales. "There was a point where premium carmakers thought the US decline would be partly compensated by the rise of emerging markets," said Nomura's Tyndall. "That story has started to unravel." Lamborghini's worldwide deliveries rose 1 percent in 2008 to a record 2,430 vehicles, supported by sales in China and other emerging markets. That won't be the case this year, Stephan Winkelmann, the division's chief executive officer, said in an interview at the Geneva show. "Of course we feel the impact of this crisis," Winkelmann said. "China is a difficult market; no doubt we're having problems there." The CEO had said on Oct 2 at the Paris Motor Show that China and the Middle East were showing strong demand and that the expansion of Lamborghini's dealer network to "new wealth islands" around the world would stave off a decline. Rolls-Royce has "a certain degree of insulation, but we're not immune", chief Tom Purves said on March 3. Spokesman Andrew Balls said yesterday that the fall off in China and Dubai is all the more obvious because the two produced such "spectacular" growth in the past. Purves had said at the Paris show that Rolls was in a "much better position than most everybody in the industry", with a six- to nine-month order book, and that luxury cars would fare better than others in the slump. Smaller model The unit of Munich-based Bayerische Motoren Werke AG is presenting a prototype of the smaller, "less formal" RR4 luxury sedan in Geneva to target a larger customer base. The car is slated for production later this year or early in 2010 and will cost from 200,000 euros to 250,000 euros. Bracknell, England-based Rolls sold 1,212 cars last year, up 20 percent. Agencies
(China Daily 03/06/2009 page17) |
